[kictanet] New gTLDs – Preliminary Reports on Competition and Pricing

[alice at apc.org]

New gTLDs – Preliminary Reports on Competition and Pricing

4 March 2009 – Mexico City, Mexico –

An important element of ICANN’s consideration of the introduction of new
gTLDs is consumer benefit as well as pricing issues.
ICANN commissioned an independent third-party report and retained
Dennis Carlton, who is a Professor of Economics at the University of
Chicago and who, from 2006 to 2008, was the highest-ranking economist
in the Antitrust Division of the U.S. Department of Justice. Professor
Carlton also is a Senior Managing Director of Compass Lexecon, a
prestigious economic consulting firm that specializes in competition
matters.
Professor Carlton has prepared two preliminary reports relating to the
introduction of new gTLDs. In one report “Preliminary Report of Dennis
Carlton Regarding Impact of New gTLDs on Consumer Welfare,” [PDF,
160K] Professor Carlton states:
“I conclude that ICANN’s proposed framework for introducing new TLDs
is likely to improve consumer welfare by facilitating entry and
creating new competition to the major gTLDs such as .com, .net, and
.org. Like other actions that remove artificial restrictions on entry,
the likely effect of ICANN’s proposal is to increase output, lower
price and increase innovation. This conclusion is based on the
fundamental principles that competition promotes consumer welfare and
restrictions on entry impede competition.”
The other report, “ Preliminary Analysis of Dennis Carlton Regarding
Price Caps for New gTLD Internet Registries,” [PDF, 60K] addresses
pricing issues associated with new TLDs. He concludes as follows:
“I conclude that price caps or ceilings on prices charged by operators
of new gTLD registries are unnecessary to insure competitive benefits
of the proposed process for introducing new gTLDs. I further conclude
that imposing price caps on the registries for new gTLDs could inhibit
the development and marketplace acceptance of new gTLDs by limiting
the pricing flexibility of entrants to the provision of new registry
services without generating significant benefits to registrants of the
new gTLDs.”
ICANN encourages the community to read both reports. A public comment
forum has been opened on these preliminary reports prepared by
Professor Carlton for 45 days, until 17 April 2009. The complete
Preliminary Reports and Public Comment Forum can be found at:
http://www.icann.org/en/public-comment/public-comment-200904.html#compri
New GTLDs and the Internet
Openness Change Innovation
After years of discussion and thought, new generic top-level domains
(gTLDs) are being expanded. They will allow for more innovation,
choice and change to a global Internet presently served by only 21
generic top-level domain names. As a not-for profit corporation
dedicated to coordinating the Internet's addressing system, ICANN is
not doing this to add to its revenue.  An implementation plan is being
developed with opportunities for public comment.  There will be
processes for objections. There has also been detailed technical
scrutiny to ensure the Internet's stability and security. There will
be an evaluation fee but it will recover costs only (expenses so far,
application processing and anticipated legal costs).
Promoting competition and choice is one of the principles upon which
ICANN was founded. In a world with 1.5 billion Internet users (and
growing), diversity, choice and innovation are key.  The Internet has
supported huge increases in choice, innovation and the competition of
ideas, and expanding new gTLDs is an opportunity for more.
Media Contacts:
Brad White
Director of Media Affairs
Corporate Affairs
ICANN
Ph: +1.202.429.2710
E: brad.white at icann.org
International: Andrew Robertson
Edelman (London)
Ph: +44 7921 588 770
E: andrew.robertson at edelman.com
Related Links and Resources:
•	New gTLD Program
Summary and Analysis of First Draft Applicant Guidebook Public Comments
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